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Abstract

This essay documents some of the recent changes in foreign investment law as a manifestation of increasing concerns with Chinese investment specifically and globalization more generally. The essay first shows how foreign investment laws in major economies have become increasingly illiberal since the Financial Crisis. Next, the essay considers the justification and impact of recent United States rules designed to reduce Chinese investment. Comparing data on merger and acquisition activity in the United States with the number of filings made to the Committee on Foreign Investment in the United States (CFIUS), the essay documents that although merger and acquisition activity is very highly correlated with CFIUS notice filing activity over the past decade, the data suggest that enhanced regulation has had its intended effect in reducing the amount of foreign investment in regulated industries and firms. In particular, the regulation—and more importantly, the way that regulation has been enforced—has served its seemingly intended purpose as a new “great wall” against Chinese investment.

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